People Don't Work For Just One Company Anymore, And That's A Good Thing

In 1989, Scott Adams began publishing
"Dilbert,"a comic strip that first
focused on the title character’s life at home but soon moved to
the workplace. It was there that it found its groove and came to
capture something essential about life in late 20th-century
America.

With a light deadpan touch, Adams critiqued the inanity of a
drone worker negotiating his way through a micromanaged corporate
maze. Adams singled out the omnipresent office cubicle as a
symbol of the disconnection and absurdity of contemporary
corporate culture, and over the years, the titles of his
collections have reflected that obsession: "Journey to
Cubeville," "Another Day in Cubicle Paradise," "Dispatches from
Cubicleland."

His comics eventually became a common presence in the very
cubicles they satirized and made several appearances on the cover
of Forbes magazine. In 2001, the design
company IDEO even collaborated with Adams on the creation of
Dilbert’s Ultimate Cubicle.

Yet even as the comic strip was achieving its peak of popularity,
the actual nature of work was undergoing the initial stages of a
seismic shift that threatens to make Dilbert’s cubicle an
outdated relic. Increasingly, a stable (if at times unsatisfying)
career working for one company is being replaced by a more
volatile and unpredictable reality: In 2010, the U.S. Bureau of
Labor Statistics reported that the average time spent at a given
job had dropped to less than four and a half years.

Even more to the point, a growing segment of the workplace is no
longer tied to a single, full-time employer. As many as 30% of
those in today’s job market are either self-employed or
part-time, and the nation’s largest companies report that 30% of
their procurement dollars are spent on contingent or “fractional”
workers.

Understandably, these changes are being met with a certain degree
of anxiety over legitimate concerns about job security and
benefits such as health insurance. But in their new book, "The
Rise of the Naked Economy: How to Benefit from the Changing
Workplace,"Ryan Coonerty and Jeremy Neuner make a
spirited and compelling case that the new reality has a serious
upside. If embraced and correctly harnessed, they argue, the
forces reshaping the nature of work can result in “more
productive, happier, and sustainable lives.”

No More Gold Watches

The gold watch presented to the worker of an earlier generation
upon his retirement came to symbolize a social contract that
defined working life for many in the
20th century. In return for job security and a
defined set of benefits, employees declared loyalty and ceded
considerable control to a corporate employer. A brand of welfare
capitalism had been forged out of the strife that characterized
the early years of the Industrial Revolution as a kind of peace
treaty between capital and labor.

The concessions on both sides were substantial. Corporations made
accommodations with unions and government regulations, while the
workforce gave up the Jeffersonian ideal of the independent
yeoman farmer. The unit of organization at the center of this
social contract was no longer the independent shop or the family
farm, but The Company.

We can no longer afford to think of the term “entrepreneur” as
belonging to an elite few.

Well before Dilbert was launched, however, the
foundations for that contract were slowly but surely coming
undone, for a number of reasons that includes technological
change, global competition and the emergence of a knowledge-based
economy. Except at the very top of the income scale, American
wages have been flat since the late 1970s.

Companies looking to cut costs and gain an edge in the brave new
world of the global economy replaced the “defined benefit” (DB)
pensions of an earlier generation with “defined contribution”
(DC) retirement plans that essentially transferred risk from the
company to the worker. From 1980 to 2008 the percentage of
workers participating in DB plans fell from 38% to 20%, while
that of those in DC plans rose from 8% to 31%.

The 2008 Wall Street crash further eroded corporate America’s
commitment to a traditional benefits package. A key way to avoid
paying benefits has been a growing dependence on temporary
workers: Between 2009 and 2012 alone, the number of temporary
employees shot up 29%. Overseas outsourcing has become an
inescapable reality. In 2011, President Obama asked Steve Jobs if
Apple’s products could somehow be manufactured in the United
States. His reply: “Those jobs aren’t coming back.”

Though the demise of the 20th century social
contract might seem like the unraveling of a long-established way
of life, Coonerty and Neuner offer a needed reminder that “the
trappings (and the traps) of modern work have been with us for
less than 100 years — a mere blip in human history.”

They contend that we can no longer afford to think of the term
“entrepreneur” as belonging to an elite few, and that the idea of
workers acting as independent agents is, in a sense, a return to
the old Jeffersonian ideal. “Right before our eyes, Jefferson’s
yeoman farmer is reasserting himself, except not as a farmer. The
fields we will till, under new social contracts, are virtual,
global, and democratic.

The authors go on to insist that we shouldn’t linger to mourn the
old contract, which had its merits but also its shortcomings. The
established way of business didn’t factor in environmental costs
or the depletion of natural resources. Consumerism and undue
corporate influence have at times adversely affected our culture
and politics. Corporate America has consistently undervalued the
work of women.

And, as the sense of alienation so effectively captured
by Dilbert has increasingly taken hold, the old model has
simply resulted in an underutilization of potential talent and
initiative. Coonerty and Neuner cite a recent Gallup poll finding
that 53% of the American workforce is not engaged in their work —
while 19% are “actively disengaged.”

Yet even while the terms of the old social contract are being
redefined or jettisoned altogether, it continues to define our
social, political and cultural infrastructure. “How we work,
where we live, what we eat, how we educate our children, how we
spend our free time, and how we measure the health and success of
our economy have all been tailored to serve the interests and
metrics of the mythical company of our grandparents,” the authors
note.

Despite the very real sense of dislocation and uncertainty
brought on by recent changes, the authors see an abundance of
opportunity in the new economy, and a good deal of their optimism
springs from what they see as a fundamental shift in attitudes
toward work, particularly on the part of the new generation known
as “millennials” (or Generation Y).

In response both to the new economic realities and to a markedly
different upbringing defined by social media, among other things,
millennials bring a new set of expectations to the workplace.
They are less likely to settle for working in a cubicle 40 hours
a week, and more likely to place fulfillment and flexibility over
job security. They argue that many so-called baby boomers have
also come to the same conclusions after years of going about
things the old way.

From Cubicles to Coworking

In his 2001 book "Free Agent
Nation,"Daniel Pink predicted that the
emerging economy would be organized around project-based teams
rather than fixed workplaces. A good example, he wrote, was the
way movies are created. An ad hoc team of actors, directors and
dozens or even hundreds of specialists quickly assembles, shoots
the film over a number of months and then breaks up, each moving
on to the next project.

Similarly, Harvard Business School professor Amy Edmondson uses
the analogy of a pick-up basketball game to define what she calls
“teaming”: bringing together a team of professionals for a
specific task. What is essentially happening here, Coonerty and
Neuner argue, is a reprogramming of what it means to be a
company.

The old cubicle-based, static company is increasingly being
replaced by a more fluid and mobile model: “the constant
assembly, disassembly, and reassembly of people, talent, and
ideas around a range of challenges and opportunities.” The
traditional office building is ill-equipped to host this new
breed of company.

And though more and more workers, especially freelancers, are
operating from home, the authors believe strongly in the value of
face-to-face interaction. Therefore, the new economy and its
“seminomadic workforce” will require “new places to gather, work,
live, and interact.”

In 2008, Coonerty was the mayor of Santa Cruz, Calif., and Neuner
was the economic development manager. Looking for innovative ways
to stimulate the local economy, they were struck by the number of
entrepreneurs and freelancers working at coffee shops in the
area, and they decided to create a workspace that would offer
those same advantages in a more structured way. Their joint
enterprise, NextSpace, became their first venture into what they
call “coworking,” or the creation of “shared collaborative
workspaces.”

The basic idea was to “flip our economic model on its outdated
head: Instead of attracting one 200-person company to Santa Cruz,
we would create a space for 200 one-person companies.” The
central mission of NextSpace is to provide members with a
flexible infrastructure that allows them to work individually and
as teams, and also nurtures what the authors call “managed
serendipity” — ad hoc collaboration between people with diverging
but complementary skills. For example, an early NextSpace success
was the creation of a new smartphone app called Fuel4Humans, a
joint effort of a nutritionist, a computer scientist and a
graphic designer.

The new economy and its “seminomadic workforce” will require
“new places to gather, work, live, and interact.”

Though still accounting for only a small slice of the economy,
coworking is clearly on the rise. A survey conducted by
Deskmag, an online magazine devoted to the new
model, found that the number of coworking spaces worldwide has
shot up from 30 in 2006 to 1,130 in 2011 (and was projected to be
double that in 2012). Meanwhile, because modern technology has
allowed workers to become increasingly mobile, they are bucking
the constraints of the traditional workspace: One survey has
found that the typical office space is empty for two-thirds of
the average workday.

Forward-thinking companies are recognizing this reality and
responding accordingly. The consumer electronics company
Plantronics, for example, knowing that on any given day 40% of
its workforce will be working elsewhere, designed its corporate
campus to only 60% capacity. And, in contrast to the old cubicle
model, its workspaces are designed on a flexible, on-demand and
as-needed basis.

Super Specialists and Smart Generalists

Early on in their NextSpace experiment, Coonerty and Neuner found
that the most productive collaborations tended to pair highly
specialized experts with big-picture thinkers. It has long been a
truism that the knowledge-based economy favors increasing
specialization, and the authors agree with that, up to a point.

Specialization has grown even more narrow, more defined,
producing what two MIT management professors term “The Age of
Hyperspecialization.” This has produced a new market dynamic in
which the headhunter of yesteryear has been replaced by “talent
brokers” who connect highly specialized talent with companies on
a project-by-project basis.

Firms like Business Talent Group (which, though founded in 2007
already has offices in New York, Los Angeles, San Francisco and
Austin) have found the new model a win-win for everyone. Clients
get the specialized help they need at a cost below that of a
full-time employee or traditional consulting firm, and
specialists are well compensated and rewarded with flexible
schedules and a greater degree of choice about which projects to
take.

On the other hand, Coonerty and Neuner themselves are proud
generalists and firm believers that generalists (and the
traditional liberal arts education that produces them) tend to be
undervalued. It’s easier to measure the results of specialists,
but someone needs to keep an eye on the big picture, to “connect
the dots.”

Citing the work of a number of thinkers and researchers, the
authors argue that the need for smart generalists is only
growing. As computers have taken over many rote tasks — and as
the “individual, linear, procedural” work the cubicle model was
built for is increasingly outsourced — the work that remains is
“largely creative and conceptual” and team-oriented, all
strengths of the smart generalist.

The Naked Economy isn’t just about ad hoc project-based teams,
freelancers and specialized consultants. Progressive,
forward-thinking companies will incorporate the new ethos into a
fresh way of doing business, and the authors cite several
companies that are at the forefront of this effort.

One is Automattic, a San Francisco-based company best known for
developing the open-source blogging platform WordPress. On the
one hand, the company embraces what the authors call the
“disaggregated workforce model.” Its founder, Matthew Mullenweg,
doesn’t have much faith in traditional office buildings or
corporate campuses: “I would argue that most offices are full of
people not working.” Accordingly, Automattic’s workforce is
far-flung: two-thirds of its employees are in various U.S.
locations, while the remainder lives in 90 cities in 24
countries.

On the other hand, Mullenweg is a big believer in face-to-face
collaboration and brainstorming, and flies his teams all over the
globe to do so. He also set up an informal workspace in San
Francisco called the Lounge. Located in a former restaurant, the
Lounge is basically just a bunch of couches and tables, no
computers. “Thus,” the authors note wryly, “Automattic might be
the first tech company to have a techless headquarters.”

An early NextSpace success was a new smartphone app called
Fuel4Humans, a joint effort of a nutritionist, a computer
scientist and a graphic designer.

The craft-beer company New Belgium Brewing, best known for its
flagship product Fat Tire Amber Ale, is another example. New
Belgium has in other ways absorbed the more fluid and
collaborative spirit of the new economy. In addition to a set of
generous and unusual perks, the company practices “open-book
management” — providing all employees with access to its
finances.

From the start, the Brewery had incorporated a number of
environmentally green practices. In 1998, the company’s cofounder
presented the employees with a plan to convert entirely to wind
power. Though there would be numerous long-term benefits, the
employees would have to sacrifice their bonuses for several years
in order to finance the conversion. The vote was a unanimous
thumbs-up. At the beginning of 2013, New Belgium implemented an
Employee Stock Option Plan and is now 100% employee-owned.

Not a Seamless Transition

Coonerty and Neuner are unapologetic champions of the promise of
the new economy taking shape before our eyes, but they
acknowledge there will be winners and losers, as well as
considerable dislocation along the way. They also concede that
not everyone will be committed to creating sustainable, connected
lives for workers, and that in the face of intense global
competition, we must guard against what one study calls “digital
sweatshops.” Social networking tools alone will not make us feel
more connected, and in some cases may do the opposite.

Moreover, they point to several public policy challenges that
will have to be tackled in coming years. These include a health
care system that to date has largely been predicated on
employer-based health insurance coverage. The coming
implementation of Obamacare will expand the range of options, but
the challenge for freelancers and independent contractors will
remain. Additionally, a 2010 Kauffman-Rand study worried that
employer-based health insurance, by discouraging risk-taking,
will be an ongoing drag on entrepreneurship.

The authors also raise the problem of payroll taxes for
freelancers — which, unlike in the case of employees working a
so-called “real job,” are not shared with an employer. Finally,
according to a survey by the Freelancers Union, up to 44% of
independent workers encounter difficulty getting paid fully for
their work.

Yet Coonerty and Neuner remain optimistic that the Naked Economy
— by stripping work bare of all the “trappings, tools, and
technologies that we’ve clothed it in” — presents us as a
society, and as individual workers, with a unique opportunity to
align economic and human development in a new way, creating “the
possibility of making a living while also making a life.”